Marketing plan for Green 2U organic catering business

Marketing Plan: Green 2U…

Marketing Plan

"Marketing Plan: Green 2U Natural/Organic/Local Business Catering"

This proposal will develop a marketing model for a sustainable, local/natural/organic catering company which would cater mainly to business functions. The market for such offerings is currently wide open and creating a business that supported and mirrored environmental goals and missions of businesses is a foundational need in the community, especially for those who find it difficult to find quality healthy food offerings at work. Many businesses are currently researching and adopting sustainable goals as part of their overall business missions and this would add another piece to the puzzle, as they would then be able to say they support their mission in a global manner, rather than seeking non-sustainable options for event catering. Despite the lagging economy the local/natural/organic food market is growing and this business model, associated with strategic analysis seems feasible. If a marketed solution meets or exceeds expectations and develops a moderate to low cost quality alternative to fast food options it is likely that the business will build itself.

II. The Challenge

Many people are becoming aware of the fact that local/natural/organic foods are better for you, better for the environment and yet are often hard to come by especially in the work environment. This business would cater to other businesses and seek partnerships with both small and large businesses to feed employees with self serve options that qualify as local/natural and/or organic specifically for events, rather than small ala cart daily options. All orders would be placed 24 hours prior to need and one week for larger events including more than 20 participants. The development of local/natural/organic food alternative businesses has been on the rise despite the downturn in the economy. People seem to care more and more about such issues as sustainability and local logistics and have environmental goals and standards as aspects of their business models. This business would allow the business world the opportunity to stand by this practice by reducing waste produced from food options at work as well as allowing individuals exposure to healthier regional and local offerings of products that are made by like minded companies who also have sustainable business models. The product would also be offered at comparable prices to medium range cost catered options that do not offer the sustainability model and be only slightly more expensive that cheep unhealthy options currently available on demand. Currently the options for sustainable food are limited for catered events in this region and such an offering would likely engender a great deal of response from consumers. Repeat customers will be gained by providing quality, good tasting options that are local/natural/organic and are served and displayed in a manner that supports sustainability and has a transparent sourcing function, which will likely help create lasting partnerships with other local providers as it becomes a win/win situation of mutual advertisements to a broad market of people who are likely to have the ability to afford to choose such options for future events and daily consumption outside of work. Finally, regarding the general reasoning behind developing a business around local/natural/organic food has to do with my personal desire to further the cause of sustainable agriculture and consumerism. (Halweil, 2003, p. 20)

A local/natural/organic delivery only catering company is the business of choice due to the fact that all that is physically needed is suppliers, customers and an adequate commercial kitchen and a transport system. Staffing would be minimal and offerings would include all fresh made and many handmade products, including some made onsite with ingredients from local sources and others sourced from other local/domestic sustainable businesses. Marketing would initially include a large number of direct mailers, with sources located via a local listing of sustainable businesses first and then a broader mailer to all local businesses with greater than 10 employees. I would seek a partnership with local providers including a local bakery, local produce sellers and some overnight shipments of local/domestic organic meats and cheeses. The spread would also respond to the growing vegetarian demographic as vegetarian options would be available to those who so choose them. All sauces and condiments will be hand made by the business and commercially sealed, so they may be stored from season to season and distributed with paired offerings or sold independently at partner retail locations. Partnerships will be transparent and will offer both higher sales and distribution for suppliers and awareness of product source, to provide reciprocal supplier demand. Descriptive source and composition details will accompany all products and will be set up with the product by the deliverer. Offerings will be limited to a sandwich/wrap self make bar that includes many individual options, all noted with source and contents, including partner logo labeling and short logistics descriptions of each ingredient. Salads will also be part of the package and will include portions per size of group, i.e. green salad will be part of every spread and dressing offerings will be company made and come in two-three varieties, a pasta salad will be optional or based on party number, another fresh seasonal chopped vegetable salad will also be optional or based on party size and be tossed with seasonal company made dressing, depending on order size and/or optional/seasonal ordering. Finally, the menu will include organic easy to eat desserts, such as whole wheat spice cake or organic brownies. The company will produce fresh salad greens from a rooftop hydroponics greenhouse garden, while most other produce will be provided by local growers. Servings will be offered in family style with serving dishes being attractive and reusable, rather than disposable and will be picked up by the deliverer at the close of the event. The serving utensils and dishes will be 100% post consumer recycled products and will also be collected by deliverer at the close of the event unless the company has the ability to recycle such products themselves.

The cost per plate service will be 10-15 dollars depending on the service spread, plus 10% gratuity for delivery and on site limited service. (compared to much less healthy alternatives at between 6-8 dollars per plate with no service and higher end catering at between 18-25 dollars per plate plus 18% gratuity) The strategic goal of the business would be to offer on average 15 spreads per month of 20-150 plate services per event. With this goal the business will meet its break even goal of 150,000 in sales within the first year, making the break even point for the year at 33 weeks, see break even analysis, appendix 1. Marketing costs for the first year will be incurred in web development as well as direct mailers and printing of source material placards. With a total estimated expenditure of $10,600 for marketing included in the expenditure $67,000 estimated fixed expenses for the year. Transportation will be on a long-term lease, to reduce costs and the building lease will be limited in need as the site requires only the infrastructure for a small commercial kitchen, no retail space and only a limited number of external parking spaces, with one doc site for delivery of goods and event loading, as most orders will be placed by phone or via the web and confirmed via phone. The site will also have a flat accessible roof with the ability to support a 20/15ft hydroponics rooftop garden greenhouse. The system will require prepayment via credit card for service, at the time order is confirmed, ensuring payment for expenses prior to service delivery. Cancellation reimbursement will not be possible in full unless cancellation occurs 48 hours prior to event delivery.

III. Situation Analysis

Competitor Analysis

Market Position: Currently less expensive catering options such as fast food/pizza/sub sandwiches or even fine dining non-catering restaurants have the greatest market position in this niche as they have previously been the only options available, short of larger and more costly catering companies which businesses might not think of for routine business meetings and gatherings. Businesses must then be made aware of a mid range option in the form of this company.

Strengths: Less costly, rapid service with no need to call more than a few hours ahead for planning, readily available with several options. In the area of more costly full catering services they have greater knowledge of the catering process and the infrastructure to offer a great deal of options and services.

Weaknesses: Little or no service comes with the product, employees may need to leave the business to pick up food, not perceived as healthy, rarely easily catering to vegetarians, lower quality fare, none or unknown alignment with natural/organic or local offerings and business practices. For more costly catering options the price point as well as the broad variety of offerings as well as the fact that they are not routinely thought of as an alternative for routine functions and meetings.

Market Share: All competitors total hold 57% market share in this niche, with many such meetings either going without meal service or allowing the individual to bring in his or her choice of limited offerings either from home or from their individual restaurant(s) of choice or to go without.

Collaborators

The retail aspect of suppliers, such as bakeries, produce suppliers and other suppliers will all be considered collaborators in this business as there will be mutual marketing with retail (sauces, spreads and dressings) and marketing offerings from this company being displayed and sold and distributed in retail locations of other local sustainable business partners and this company will market the sources of its products at each and every function.

Climate

PEST Analysis

Political

The initial business venture will have only one proprietor employee limiting liability and cost of doing business. Expansion may need to occur within the first year if events overlap and a second and third employee may need to be staffed. Employees would be offered a competitive wage to a wait staff wage in the area, and the gratuity for each event will be forwarded in addition to wage. The position(s) will be part time and will not offer benefits. Candidates will need to be trained in professional and preferred set up and tear down and present with a clean driving record and a good knowledge of the region for delivery.

Economic

Currently the economy is in a recession creating demands on companies to trim expenses. This is both a strength and a weakness for this type of business as it will limit the willingness of some organizations to provide catered meals for events while on the other hand catering events can boost moral and might provide a less costly way to improve the business organization climate while spending only a limited amount of money.

Social

The pull in the economy to sustainable business practices and greener business goals will also provide a greater opportunity for holistic sustainable business practices combined with the desire to support the local economy and other businesses that have sustainable goals in their own markets. The awareness of natural/organic and local food needs of a community is also growing in a broad sense and this will also help the company to build clientele.

Technology

The internet page of this company as well as cellular communications will serve as a backbone for the development of new and existing customers as it will serve as the ordering staff as individuals will be able to order options from the menu and provide information about the event and any future events as well as leave feedback. Individuals will also be able to use point of sale technology online to prepay for their order(s). Confirmation will then occur via telephone and any special needs or alterations will be developed personally. Food growth and service technology will also be essential as creating a productive rooftop greenhouse, transporting other raw materials and finally cooking and storing products until the time of delivery will be handled in the most technologically efficient manner possible in the catering kitchen as well as in the cold transport van(s). Internet and cellular technology are well supported in this region. Garden infrastructure may need consultation and research and development. The cooling system on the delivery van will be supported and maintained by the leasing agent. Kitchen technology will be maintained by the proprietor. Marketing fliers, placards and direct mailers will be ordered via a local green printer who will use soy ink on recycled paper.

SWOT Analysis

Strengths

1. Open market for local/natural/organic prepared foods. (Lengeman, 2007, p. 52)

2. Minimal investment.

3. Supporting and offering other businesses the opportunity to act responsibly and within their own sustainability models.

4. Research knowledge is obtainable on local area catering as well as growing greens hydroponicly, marketing sustainable food, local logistics and marketing partner sources. (Henderson, 1998, p. 112) (Norberg-Hodge, Merrifield & Gorelick, 2002)

Weaknesses

4. Investment in research and marketing may be substantial.

5. Limited current knowledge of catering business and local/natural/organic logistics and production.

Opportunities

1. Open market for offerings of local/natural/organic food offerings to businesses with sustainable missions.

2. Desire by many businesses and individuals in them to globalize sustainability goals and missions. (Furniss, 2006, p. 45)

3. Good potential source partners in the area, with like minded local/natural/organic farmers, bakeries and other businesses growing and seeking alternative marketing and increased awareness.

4. Businesses may be seeking to offer benefits that are non-monetary but still improve moral.

5. Fewer people are eating out at work and elsewhere and may choose to eat in if available.

6. Catering option is a stop-gap solution.

Threats

1. Existing lower cost catering options.

2. Future similar catering options.

3. Potential for partnership expansion into same niche area.

4. Weak national economy.

5. Fewer people are eating out.

6. Businesses are cutting costs.

IV. Market Segmentation

Segment 1

Description: Businesses with greater than 10 employees, needing mid range routine and special event catering, with a business mission of sustainable practices.

Percent of sales: 95%

What they want: A mid range catering option that is easy to eat and coincides with green/sustainable business mission, improved corporate social climate at a low cost, quality healthy natural/organic/local food presented in a transparent manner delivered in a timely manner and with support services.

How they use product: To meet the food needs of employees and others in a quality and professional setting to improve company moral and in alignment with sustainable local business practices and support of others with similar goals and practices.

Support requirements: Professionalism, timeliness, transparency of health and sourcing functions, high quality service and presentation.

How to reach them: Direct mailers to event coordination staff, call follow up to promote repeat business, word of mouth, web presence.

Price sensitivity: Mid range pricing, significantly lower than traditional catering prices but slightly higher than less healthy low cost alternatives.

Segment 2

Description: Retail sales of dressings, sauces and spreads on location at supplier retail outlets.

Percent of sales: 5%

What they want: Varied healthy natural/organic/local high end dressings, sauces and spreads to be used at home and again to market transparent distribution and other local businesses with sustainable practices.

How they use product: Home use and as a market introduction to business catering services, as a contact point.

Support requirements: Retail distribution contacts to restock products. Packaging of products, retail display alternatives for varied retail sites with limited physical retail space. Appropriate labeling with mission and contact information as well as legal ingredient lists and food safe dating and preparation.

How to reach them: Retail site placement.

Price sensitivity: The product will be a high end/luxury item.

V. Alternative Marketing Strategies

Alternative marketing strategies were limited in this case though proprietor sample distribution and live meet and greet where considered. This may be a tactic tried in the near future if limited response from the business community is seen in the first year. Price discounting for larger fare offerings may also be tried in the future or second order cost discount. Gratuity waving could also be an option if business is slow in the first year.

VI. Selected Marketing Strategy

The current marketing strategy was chosen as a result of the fact that direct mailers and web presence seem to provide the largest number of hits for possible customers. Retail location distribution, though a small segment of the strategy offers a quid pro quo for suppliers seeking to create mutual support projects in transparency and receive marketing recognition at events. Supporting local business is the right thing to do and must be reciprocal and create strategic advantages for the varied business services.

Product:

Brand name: Green 2U "Company Catering Natural/Organic/Local"

Quality: High quality fresh natural/organic/local ingredients with transparent sourcing.

Scope of product line: Small menu with limited offerings of sandwich/wrap plus 1 salad and two added salad options to meet number of guests and/or desired price point, plus a desert to feed number of proposed guests.

Warranty: Quality assurance with discounted/free future order depending on problem reported.

Packaging: Transparency of sourcing on display for all ingredients at events. Packaging of retail sauces/dressings and spreads to meet current regulations of ingredient lists as well as to market the company and limited source or partner logo placement. Company mission and scope as well as contact information.

Price:

10-12 per plate for catering with the up-sale option of added salad or more desert.

Possible discounts for second orders.

Bundling of retail sauces/dressings/spreads with event spread.

Prepayment 48 hours in advance of event for greater than 20 guests prepayment 24 hours in advance of 10-19 guests.

Distribution:

Delivery only for event catering.

Retail distribution of limited product line at intermediary source partners' retail locations.

Distributor intermediary partners must have sustainable business and sourcing practices, natural/organic and/or local sourcing.

Locations determined by customer and intermediary.

Delivery for primary product (catering service) will be responsibility of proprietor, proprietor will either deliver retail goods to locations when asked to replenish stock or replenish stock upon pick up of needed goods or distribute retail products with delivery from partner source companies. Warehousing will be provided at the business location and should be limited. Raw materials for retail and catered raw materials will also occur on site.

Promotion

Web placement, linked sites as well as search engine retrieval keys. Direct mailers 1,000 per month to start, pending response.

Public relations will include possible feature on morning news.

Promotional programs are yet to be determined but could include discounted second order or discount post referral to another customer.

Budget, see break even analysis Appendix 1

Projected results of promotion are to book 15 average events per month serving between 20-150 guests for annual first year sales of 150,000.

VII Short- and Long-term Projections

The strategic goal of the business would be to offer on average 15 spreads per month of 20-150 plate services per event. With this goal the business will meet its break even goal of 150,000 in sales within the first year, making the break even point for the year at 33 weeks, see break even analysis, appendix 1. Marketing costs for the first year will be incurred in web development as well as direct mailers and printing of source material placards. With a total estimated expenditure of $10,600 for marketing included in the expenditure $67,000 estimated fixed expenses for the year. The market share for this niche business is expected in its first year to be about 5% of catering and 1% of overall alternative offerings. Increased market share will be expected in the following year with a growth rate of 1% per year for the first three years in both markets. Long-term market share over a ten-year period is expected to be 10-15% of catering and 5% of alternative offerings.

VIII Conclusions

In the first year of operations the fixed costs of goods per unit production will be increased as initial investment in equipment and supplies was included in the break even analysis and fixed costs will decrease by more than 50% in the following year. Future profit increases will be based on a relatively slow growth rate of variable costs, i.e. food costs and recyclable disposables. Unit sales will have a profit margin of 50% or greater, where costs per service unit will be no greater than $6-10 and the per plate charge will be $13-22 depending on variable options. A break even analysis is particularly helpful for the food service industry as the industry itself does not boast rapid break even points for new businesses as initial investment is usually heavy, though this is limited by the nature of this business as it requires no retail operations and only one full time staff to sustain these sales. (Korn, 2008, p. 43)

Research conducted to develop this marketing plan demonstrates that the local/natural/organic markets are growing in a substantial manner and that greener more sustainable business practices are becoming common place in many business arenas. See Appendix 2.

The Organic Trade Association says organic products will be commonplace by 2025. In 2003, the organic foods market was worth $10.8 billion and it is expected to hit $46 billion by 2010. Growth in organic foods averaged a brisk 19.5% annually from 1997 to 2003. A study commissioned by Whole Foods Market found that nearly two-thirds of U.S. consumers purchased organic goods in 2005, up 17% from 2003 and 2004. (Lengeman, 2007, p. 42)

"We're seeing the beginnings of an economy in transition, where the leading thinkers have made the connection between profitability and environmental stewardship, and corporate responsibility and brand reputation, and are looking at these issues as part of their core business." (Furniss, 2006, p. 45)

This coupled with a challenged economy that may see many businesses seeking to reduce costs by reducing financial benefits to employees while attempting to retain and grow a positive business environment could lead business level catering into a great place in the market. (Arthur, 2001, p. 32) Business catering is also a viral marketing proposal as conferences and other events often bring people with varied networks and standards together in one place and making a good impression by providing quality with a sustainable mission is and ideal marketing situation. Though initial marketing may be challenging, utilizing direct mailers and other similar strategies, viral marketing will eventually improve repeat and new customers seeking to globalize sustainable practices within their businesses and provide sustainable and healthy options to their caring employees. The menu needs to be initially limited to a box lunch offering served family style as this tactic will keep costs down while the business grows to offer other options but it will clearly meet the needs of the client with easy to eat and access healthy alternatives to the fatty pizza and cold-cut stretch sandwiches currently available.

Seeking business partners who have like minded service ideals, and value and practice sustainability is an essential aspect of the development of this business or any like it. The business model and the research associated with business catering, as the potential jumping off point for other types and sizes of business event catering done with sustainability in mind seems to be an ideal business to start in the present economy. With limited investment of less than $100,000 this company could be up and running, with a break even point nearing 33 weeks in the first year and far less than that in future years. Growth potential for this company is limited only by its ability to sustain partnerships and offer reciprocal options. Sales outside of catering will be limited but could be substantial and would rely on the retail overhead of other companies, and some web sales. A web presence for ordering and information would also be an essential aspect of the operating of such a business as direct mailers could reference a web address that would offer the consumer much more information about menu options, portion sizes, transparent local and sustainable sourcing and the overall green/sustainable mission and quality development of the business. The goal of the business would be to seek zero attrition with repeat business due to high quality and like minded business goals.

Appendix 1

Break Even Analysis

Breakeven Analysis Calculator

Enter Total Annual Overhead:

This includes rent, electricity, telephone, salaries, sales and marketing expenses, and other fixed costs.

Enter YTD Sales:

Enter YTD Cost of Goods Sold (Cost of Sales)

Period for YTD calculations:

weeks

(Apportioned Overheads for

52 weeks = $67,000.00)

YTD Gross Profit = $104,000.00

YTD Gross Margin = 69.33%

YTD Income from Operations

(before taxes) = $37,000.00

Estimated Annual Income at current margin = $37,000.00

Breakeven Analysis

In any given year, you reach your breakeven point when your year-to-date gross profit equals your annual overhead.

With Annual Overhead of $67,000.00, and 69.33% Gross Margin...

Number of sales to break even this year = $96,639.00

Number of weeks it will take to break even this year: 33 weeks

(based on YTD performance)

Congratulations! You have covered your annual overhead. Provided your overhead does not increase and you maintain an average gross margin of 69.33%, you will earn 69.33 cents for every additional dollar of sales this year. (Break Even Analysis Calculator: http://www.inc.com/articles/2003/10/simpleformula.html)

Appendix 2